KARACHI: A flare-up in tensions between the US and Iran could aggravate Pakistan’s economic situation, forcing the country – which relies heavily on oil imported through the Strait of Hormuz – to work toward defending its economic and political interests, analysts said on Tuesday.
A flurry of attacks in and around the Strait of Hormuz – the busiest transit lane for seaborne oil supplies that splits Iran from its Arab neighbors – has left six oil tankers damaged since May this year, adding to the tensity between Washington and Tehran.
The US authorities hold Iran responsible for the mounting attacks on the oil tankers, an allegation which Iran denies.
In June this year, US Secretary of State Mike Pompeo said: “This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication.”
In a worst case scenario, analysts expect Asian countries, including Pakistan, to be engulfed by the flames of war and increasing oil prices in the Gulf region.
“As the global economy relies heavily on oil supplies, closure of the Strait of Hormuz [will lead to] a sharp increase in prices, which will cause panic in all world markets. In this situation, Kuwait, Qatar, Bahrain, Iraq and the UAE will stop shipping oil containers, and Saudi Arabia will be forced to export its oil through the Red Sea ports,” Omid Shokri Kalehsar, a Washington-based Senior Energy Security Analyst and Visiting Research Scholar at Center for Energy Science and Policy (CESP) and Schar School of Policy and Government at George Mason University, told Arab News.
“In this case, the conflicts will take place in the peak region, which will lead to a military confrontation,” Shokri added.
Starting from yesterday, Pakistan began receiving oil supplies from Saudi Arabia on deferred payments worth $275 million a month. “These supplies will continue over the next three years with a total value of $9.9 billion,” a statement issued by the Saudi embassy in Islamabad said on Monday.
In October last year, the Kingdom of Saudi Arabia had announced an economic support package for Pakistan which included $3 billion for supporting the balance of external payments. The package also included oil imports on deferred payments. The agreement between the two sides reached a total amount of $20 billion, the statement added.
Additionally, Saudi Aramco will supply 110,000-115,000 barrels of crude oil to Pak-Arab Refinery and National Refinery on a daily basis.
Pakistan has imported petroleum crude worth $4.2 billion, 12% higher, during the July–May period of the outgoing fiscal year ending on June 30 as compared to $3.7 billion, according to the Federal Bureau of Statistics.
However, analysts argue that – despite the Kingdom’s generous offer – supplies would be affected by any “dangerous escalation” between Iran and the US. Pakistan meets 85% of its oil needs through imports.
“Pakistan’s majority of oil and Liquefied Natural Gas LNG passes through strait of Hormuz. Obviously, a major increase in price, insurance and risk premium is going to be costly for Pakistan,” Samiullah Tariq, Director Research at Arif Habib Limited, said.
Amid rising tensions in the Gulf region, “the insurers have increased the premium of those vessels crossing strait of Hormuz,” Masood Abdali, a Texas-based energy expert and former business development manager of Weatherford, Saudi Arabia and Bahrain, told Arab News.
“There are slim chances of a US-Iran war,” he said, adding that in a worst case scenario “if the Strait of Hormuz is closed, Pakistan and Asian countries would suffer much.”
“Pakistan’s lower capacity of oil storage could be the matter of the country’s security,” he added.
“Security of supply is very vital for both exporters and importers. Any tension and any possible confrontation in the Strait of Hormuz is not in favor of world oil market,” Shokri said.
Meanwhile, defense analysts ruled out Pakistan’s neutrality amid the regional flare-up.
“Pakistan has a very clear stance that if Makkah and Madinah are attacked, we would stand up to defend it. I don’t think if any country attacks Saudi Arabia, Pakistan will not be involved. Pakistan can and would play a role of mediator between Arabs and Iranians,” Lt. General Retd. Naeem Khalid Lodhi, former minister of Defense and National Security Division told Arab News.
Lodhi appreciated the wisdom expressed by Saudi and other Arab leaders in the face of terror attacks on oil tankers. “I think Arabs and their leadership have expressed best example of tolerance, despite the fact that tankers were attacked in their areas and around. This was display of wisdom of higher degree. They have understood the conspiracy,” Lodhi said.
“In case of war smuggling of oil from neighboring Iran to Pakistan would increase, though the Pakistani government would try to stop such illegal inflow but it won’t be so easy to handle the situation,” Lodhi added.
Analysts believe that despite the sanctions imposed by the US, Iranian oil continues to be supplied to the world market – a fact which is being ignored by the US.
“Reports indicate that Iranian oil supply is not fully suspended. Iran is selling oil to a number of Asian countries, but payment is made in a third country. In this situation, it is in the interest of Iran that the Strait of Hormuz remains open for oil transportation,” Abdali said.
“Iran needs to revise its regional foreign policy. Iran with huge oil and gas reserves needs active energy diplomacy to be a key player in the regional and world energy market. De-escalation of foreign policy would help Iran solve its problems with the US,” Shokri added.
Closure of Strait of Hormuz could spell economic doom for Pakistan
Closure of Strait of Hormuz could spell economic doom for Pakistan
- Analysts worry US-Iran war would impact oil supply, increase prices in the region
- A flurry of attacks in and around the Strait of Hormuz has left six oil tankers damaged since May this year
Pakistan says will launch ‘smart kinetic operations’ against separatist groups in southwest
- Announcement follows the killing of 20 coal miners with heavy weapons by unidentified militants
- Balochistan’s chief minister says he has full support from the federation to deal with the situation
QUETTA: Balochistan Chief Minister Mir Sarfaraz Bugti on Saturday announced plans for “smart kinetic operations” against separatist militants operating in the southwestern Pakistani province after unidentified assailants killed at least 20 coal miners with heavy weapons in Duki, located in the Loralai Division.
The incident, which occurred on Friday, sparked protests from labor organizations, with miners halting operations to demand better protection for workers. The attack was widely condemned, including by Prime Minister Shehbaz Sharif, who directed authorities to provide urgent medical treatment to the seven people injured.
Bugti reiterated the government’s resolve to tackle militants during a media interaction after visiting the trauma center in Quetta to meet the injured.
“We are going to launch smart kinetic operations against terrorist groups,” he told the reporters. “Terrorists have an advanced communication system. We have to think whether we have provided advanced technologies to our security agencies [as well].”
He said the security forces had launched a search operation in Duki after the attack and were pursuing the militants.
In response to a question, the chief minister said the province had full support from the federal authorities to deal with the situation.
“I am saying again there isn’t any need for a full-scale military operation in Balochistan, but we have to rethink our strategies,” he continued.
Balochistan, which shares its border with Iran and Afghanistan, has been the scene of a low-level insurgency by separatist militants who blame the government for exploiting the province’s mineral resources without benefiting its residents. The charge is denied by the state which says it has launched several high-profile projects for the development of the region.
Last August, ethnic nationalist militants hit several civil and military targets in a string of coordinated attacks in the province, killing more than 50 people.
A majority of the assaults were claimed by the Balochistan Liberation Army (BLA), the most prominent among a number of separatist groups operating in the province that is home to key China-led infrastructure projects, including a port and a gold-copper mine.
The government refused to launch a full-scale military operation after the attacks, but the military has stepped up intelligence-based operations to quell the rising tide of the separatist insurgency in Balochistan.
Pakistani general reaffirms support at Riyadh forum to strengthen Saudi Defense Forces
- The forum aims to enhance bilateral security cooperation, particularly in defense production and technology
- Both sides agree modern technological advancements necessitate increased defense industrial cooperation
KARACHI: A top Pakistani general reaffirmed his country’s commitment to building the capacity of the Royal Saudi Defense Forces this week while attending a bilateral forum in Riyadh, according to a statement by Inter-Services Public Relations (ISPR), the media wing of Pakistan’s military, on Saturday.
The Pakistan-KSA Bilateral Defense Industrial Forum is a platform aimed at enhancing security cooperation between the two countries, particularly in the areas of defense production and technology.
The 7th meeting of the forum took place in Riyadh on Thursday, during which Pakistan’s tri-services delegation, led by Chief of General Staff (CGS) Lt.-Gen. Muhammad Avais Dastgir, discussed a wide range of security-related issues.
“During the meeting, the CGS affirmed Pakistan’s continuing support towards capacity building of Royal Saudi Defence Forces,” the ISPR said.
Pakistan has regularly trained Saudi military officials and shared its professional expertise with the kingdom in various defense-related areas.
The official statement said that Saudi officials also “acknowledged Pakistan’s achievements and sacrifices in war against terrorism and its valuable contributions towards regional peace and stability.”
The bilateral forum also focused on challenges to global and regional security and their implications for the defence forces.
Both sides noted that rapid advancements in modern technologies necessitated further enhancing defense industrial cooperation in critical capabilities between the two states.
“In this context, progress of ongoing areas of collaboration was reviewed while new areas of collaboration were also agreed,” the ISPR said.
15 dead, seven injured in renewed tribal clashes in Pakistan’s Kurram district
- Police say the incident was triggered after unidentified gunmen opened fire on an influential tribal elder
- Previously, relatively small incidents have led to deadly tribal conflicts and sectarian violence in Kurram
DERA ISMAIL KHAN: Tension gripped Pakistan’s northwestern Kurram district as clashes broke out between two rival tribes, leaving 15 people dead and injuring another seven amid sporadic gunfire in parts of the region, officials said Saturday.
Kurram, formerly a semi-autonomous tribal area, has a history of bloody conflicts that have claimed hundreds of lives over the years. A major conflict in the district, triggered in 2007, lasted for years before being resolved by a jirga, a council of tribal elders, in 2011. However, clashes erupted again over a property dispute in July this year, leaving 38 dead and 158 injured in the region.
Speaking to Arab News over the phone, Kurram Deputy Commissioner Javed Ullah Mehsud said the recent round of violence began after unidentified gunmen opened fire on an influential tribal elder, Ijaz Hussain, who sustained serious injuries in the attack.
“Subsequently, a passenger convoy came under attack in the Kunj Alizai area of the district, in which 15 people were killed and six others injured,” he said.
Mehsud informed the district administration was working to control the situation with the help of local leaders and law enforcement officials, trying to prevent the conflict from spreading to other parts of the area.
He described these efforts as crucial, as relatively small incidents in Kurram have previously escalated into deadly tribal conflicts and sectarian violence. The region is also prone to militancy.
“For a permanent solution to such problems, an inclusive tribal committee should be formed to keep the situation in constant check,” Brigadier (retired) Said Nazir Mohmand, a security analyst familiar with the area, told Arab News.
“Secondly, the writ of the state must be ensured in the district for swift action against troublemakers,” he added.
Dr. Mir Hassan Jan, Medical Superintendent at the District Headquarters Hospital in Upper Kurram, said the authorities had put health facilities in the area on high alert to deal with emergency situations.
“We have received nine bodies and another six injured from the clashes in Kurram,” he said. “The rest of the casualties might have been taken to other health facilities in the district.”
Pakistan lists SCO summit attendees, excluding Afghanistan, ahead of high-profile event
- Afghanistan holds the SCO observer status that has reportedly remained inactive since Taliban’s 2021 takeover
- Pakistan has made extensive preparations for the summit, focusing on Islamabad’s security and beautification
ISLAMABAD: The foreign office of Pakistan released the names of countries attending the 23rd meeting of the Council of Heads of Government (CHG) of the Shanghai Cooperation Organization (SCO), scheduled for October 15-16 in Islamabad, notably excluding Afghanistan, while key member states like China, Russia and India are set to attend.
Afghanistan is not a full SCO member but holds observer status, which has reportedly remained inactive since September 2021, following the Taliban takeover.
Pakistan’s relations with Afghanistan have severely deteriorated for more than a year over the issue of cross-border militancy, with officials in Islamabad repeatedly accusing the Taliban-led government of “facilitating” armed groups responsible for attacks on Pakistani soil, an allegation denied by Kabul.
Tensions further escalated last year when Pakistan decided to expel Afghan refugees, citing national security concerns and the alleged involvement of some refugees in militancy and crime.
“Pakistan will be hosting the Twenty-third meeting of the Council of the Heads of Government (CHG) of the Member States of the Shanghai Cooperation Organization (SCO) from 15 to 16 October 2024 in Islamabad,” the foreign office said in a brief curtain raiser.
“SCO member States will be represented by the Prime Ministers of China, Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan as well as the First Vice President of Iran and External Affairs Minister of India,” it added. “Prime Minister of Mongolia (Observer State) and Deputy Chairman of the Cabinet of Ministers and Foreign Ministers of Turkmenistan (Special Guest) will also participate in the meeting.”
The foreign office said Prime Minister Shehbaz Sharif will preside over the SCO meeting in his capacity of the current chair of the CHG.
He will also hold important bilateral meetings with visiting heads of delegation on the sidelines of the summit.
The government has made extensive preparations for the event while focusing on both security and beautification of Islamabad.
According to Dawn newspaper, over 10,000 security personnel have been deployed to ensure the safety of around 900 international delegates.
Special efforts are also being made to enhance the appearance of the city, particularly along VIP routes and the Jinnah Convention Center where the summit will be held.
The prime minister himself has finalized the arrangements by visiting all these places.
The SCO meeting will discuss ongoing cooperation in the fields of economy, trade, environment, socio-cultural linkages and review the performance of the Organization.
The participants will adopt important organizational decisions to further enhance cooperation among SCO member states and approve the budget of the organization.
Saudi businessman expresses interest in setting up agricultural farms during visit to Pakistan
- Najd Gateway Agricultural Company has already agreed to cultivate highly nutritious cattle fodder for Pakistan
- Its chairman says Pakistan’s agricultural activities will strengthen further while praising government’s efforts
ISLAMABAD: The top official of a leading Saudi agricultural firm expressed interest in developing its own farms in Pakistan, state-owned media reported Saturday, following his visit to the Green Corporate Initiative headquarters in the federal capital.
The Najd Gateway Agricultural Company from Saudi Arabia is a key player in the expansion of agricultural and livestock initiatives, both domestically and internationally.
Earlier this year, in March, the company signed an agreement with the Special Investment Facilitation Council (SIFC), a hybrid civil-military body facilitating foreign businesses in Pakistan, to cultivate 5,000 acres of highly nutritious cattle fodder.
Its chairman, Prince Mansour M. Al Saud, interacted with officials at the GCI headquarters, who aim to modernize agriculture in the country, to explore investment opportunities.
“I visited [the Green Pakistan Initiative headquarters] today and spent almost two hours here,” the chairman of the Saudi company said in a video shared by Radio Pakistan. “I have seen many primary objectives they are working on, including land development and how they are focusing on biodiversity to create a significant impact on the social lives of the communities.”
“As an investor in agriculture here in Pakistan, I would be glad to get involved in their system and program, and to establish our own farms and projects in Pakistan,” he added.
Pakistan and Saudi Arabia signed 27 agreements and memorandums of understanding (MoUs) worth about $2 billion during the visit of the kingdom’s Investment Minister Khalid Bin Abdulaziz Al Falih.
Federal Minister for Planning and Development Ahsan Iqbal specifically mentioned the objective of increasing agricultural productivity as a key focus area for the government during his meeting with the Saudi official.
The Najd Gateway Agricultural Company’s chairman also expressed hope that Pakistan’s agricultural activities will strengthen in his video message.
